An effort to increase Miami-Dade County’s investment policy by a third to add county funds that could be invested in Israeli government-backed securities was postponed indefinitely last week.
Mayor Daniela Levine Cava’s initiative entered the hot-button arena. Legislators at their annual session in Tallahassee are seeking to bar state and local governments from investing public funds that could advance policies other than maximizing returns and protecting government funds. This has been a top priority for Gov. Ron DeSantis.
The issue before county commissioners was the mayor’s recommendation to approve changes to the county’s vast investment policy to increase the maximum amount of the county’s investment portfolio that can be invested in securities backed by the government of Israel from 3% to 4%. – Third addition.
But Commissioner Anthony Rodriguez moved to postpone the item, and Commission Chairman Oliver Gilbert III seconded his motion.
The mayor’s justification for his proposed move did not touch on the investment concerns Florida’s government is attacking, considering the issues of diversity, equity and inclusion. His rationale for the proposed change was that Israeli bonds are “highly rated and offer competitive yields to domestic bonds with similar terms.”
His argument also noted that Israeli bonds are an authorized investment under Florida law.
“Increasing the allowable amount for purchases to 4%,” his memo to commissioners said, “will allow for greater portfolio diversification and potential interest income.”
His memo states that the county’s investment objectives, in order of priority, are “protection of principal, liquidity of funds and maximization of investment income.
Commissioners adopted Miami-Dade’s 12-page investment policy in 2004 and revised it in 2009, 2016 and 2020.
“Investments are made in accordance with the ‘Prudent Person’ standard which calls for investing in the fashion of a prudent investor who uses prudence and wisdom “in portfolio management” and who does not speculate as a primary concern. “Investments are safeguards, said the mayor’s memo to commissioners signed by Chief Financial Officer Ed Marquez.
The issue was heard March 14 by the county’s Infrastructure, Operations and Innovation Committee, which forwarded it to last week’s full commission meeting with a favorable recommendation.
The county’s investment policy does not state in writing that diversity, equity and inclusion are used as investment criteria. It notes that monthly reports of all investments must be provided to the clerk of circuit and county courts and the director of finance. Unlike other county positions, the mayor and clerk of courts jointly appoint the finance director.
The county’s investment policy lists 12 different elements in its structure, one of which is “bonds, notes or instruments backed by the full faith and credit of the Government of Israel rated equally by one or more or at least two recognized rating agencies.”
According to the policy, the maximum length of maturity invested in Israeli bonds is five years. The policy now states that “a maximum of 3% of the portfolio may be invested in bonds backed by the full faith and credit of the State of Israel.”
Among the 11 other allowable elements in the county’s investment portfolio are local government savings funds, Securities and Exchange Commission registered money market funds, interest-bearing time deposits or demand accounts, direct obligations of the U.S. Treasury, federal agencies and instruments.
No country except the United States and Israel is mentioned in the investment policy.